(2016-01-16) World Bank Internet Development Benefits Vs Inequality

The World Bank released a big report on the Internet as a force for Economic Development.

DannyYadron focuses on the risks of increasing Income Inequality in the Renting Economy. The report goes on to say that many of the shortcomings of American tech firms can be overcome if governments can increase public access to the web.

Yochai Benkler thinks this all misses the role of Power as designed into various markets. The framework that the report adopts is skills-biased technical change (SBTC): technology has made skilled people more productive and less skilled people redundant. Income inequality reflects these productivity differentials. Not surprisingly, the report’s core recommendations with regard to inequality are for countries to invest heavily in education, leverage the internet through massively open online courses (MOOC-s) or Khan Academy courses to improve skills. One problem is that the theory has largely fallen apart in the past couple of years. When originally developed in the early 1990s it was brilliant and fit the US data from the 1980s well. Since then, it needed ingenious adaptations every decade to make the theory fit the data that stubbornly refused to fit the predictions of its prior iteration... Whatever the details, we will need to adopt a much more generous social insurance system to allow us to deal with the turbulent work environment if we are to avoid disruption on a scale that will simply overwhelm our political systems. We are already seeing the shadows of that instability in both US electoral rhetoric (Donald Trump) and the resurgence of EthnoNationalism in Europe... But we won’t be able to solve everything with better taxes and social insurance. We will also need to design technologies and supporting institutions that will leverage the new social affordances of the net to equalize the power imbalance that platforms like Uber and MTurk have come to embody.